OPINION15 August 2011

Making the most of a hot zone


Crawford Hollingworth shows how technology and behavioural economics are working hand in hand to catch people ‘in the moment’ and get them to act on impulse.

As an example, think how many times you have told yourself that you would eat or drink less the morning after a big night out. This is what we call the cold zone – the morning after. But back in the pub the next night with all your mates you frequently lose your resolve, because this is a more emotionally charged hot zone.

Empowered by technology we can use this understanding to encourage specific behaviour in the hot zones. Here are two examples, one for saving and one for giving.

First the Impulse Saver from Westpac – the world’s first iPhone app that allows you to save at the touch of a button. You download the app and pre-select the amount you want to save each time you touch the red button. Whenever you feel the impulse, you touch the red button and the money is transferred from your current account to your savings account. It’s an example of using technology to take advantage of impulse moments when people are in the right frame of mind, thereby overcoming the ‘power of now’ bias and encouraging people to save.

And for charitable contributions Vodafone’s JustTextGiving makes it easy to donate. Here’s how it works: let’s say your local swimming club needs to raise money for an additional pool. It decides to hold a swimathon and joins JustTextGiving by Vodafone to aid its fundraising efforts. On a poster describing the new pool fundraising campaign there would be a Vodafone Individual Code (VIC) which looks like this: ‘SWIM36’. You simply text this code along with your donation and the money goes straight to the club. Your text would look like this: ‘SWIM36 £5’.

This is technology and behavioural economics working hand in hand.

There are also many examples of brands creating these hot zones, building high emotional experiential energy and brand connection, such as Nike concept stores. On a smaller level the Saffron Building Society’s ‘Goals’ saving plans does this well, using another BE concept – that of mental accounting, which says we are better savers if we can compartmentalise our goals. Saffron taps into this with various platforms: ‘Plan, save, get married’ – with lots of emotion and lots of pink colours – or ‘Plan, save, get a car’ – with lots of pistonhead emotional language and imagery. You get all the emotion and desire and then the cool financial planning element.

One final hot zone comes to mind – that of Captain Morgan and the amazing Morganettes – but that is probably enough heat for now.